Debt management and personal finance issues have become burning issues because of the recession. At the end of November 2009 personal debt in the UK had risen by 0.7%compared to the same period in 2008 and had reached
Debt Relief – How Consumers Are Eliminating 60% of Their Unsecured Debt Every Day
January 15, 2010 By Leave a Comment
The recession and economic turbulence has changed the way lenders of unsecured debts recovered debts from their creditors. There was a time when borrowers had to fight tooth and nail for securing debt relief for even the penal interest and penal charges that had been imposed by the lenders. Today, lenders are falling head over heels to offer debt relief for even the principal amount owed by the borrower. Thousands of borrowers are making use of the changed circumstances to bring down their debts by as much as 60-70% on a daily basis.
Lenders have always adopted the moral high ground when borrowers approach them for debt relief. The “you are to blame for your problems” approach was commonly used to settle questions of interest waiver and penal charges waiver. Today, the tables have turned. The lenders were forced to approach the government for a share in the stimulus package for their survival. The government agreed but the funds have come at a cost. The lenders now had to play their bit in helping the economy get back on track. This meant offering debt relief to borrowers to help them get rid of excessive debt.
Lenders are going beyond merely suggesting debt consolidations and other remedies that simply transfer debts from one lender to another. As on date, the average borrower who opts for debt settlement owes about $30,000 spread over six creditors. Lenders offer debt relief of 60% of the original debt. In some cases, this figure can stretch up to even 75-80%. This depends on the negotiation skills of the borrowers or their representatives. This means that the average borrower is required to pay just $12000 to settle $30000 owed to different creditors. Add the $4500 fees for debt settlement companies and the borrower shall be free of debt at very generous terms.
Not only are consumers eliminating 60% of their debt in a single day but they are also getting a period of 24-48 months for repayment of the remaining amount. The only requirement for debt relief is that the borrower shall open a specific account and deposit the repayment money in that account on a monthly basis.
If you want to get out of debt and hire a debt settlement company for debt negotiation then I have an important piece of advice. Do Not go directly to a particular debt settlement company but rather first go to a debt relief network who is affiliated with several legitimate debt companies. In order to be in the debt relief network, the debt settlement companies must prove a track record of successfully negotiating and eliminating debt. They must also pass an ethical standards test. Going through a debt relief network will ensure that the debt company you are provided with is a legitimate and respected company. This is the most efficient way in finding the best debt settlement companies and increasing your chances of eliminating your debt.
FreeDebtSettlementAdvice.com is one of the largest and most respected debt relief networks on the marketplace today. To find a debt settlement company through FreeDebtSettlementAdvice.com check out the following link:Free Debt Advice
Bankruptcy Chapters Explained – Bankruptcy Information and Other Common Questions
January 13, 2010 By Leave a Comment
A bankruptcy filing should only be considered as a last resort measure. If you have exhausted all other possibilities, your minimum payments are no longer within your means and you are already defaulted in a few payments or if you have lost your income you are no longer able to repay your debts, then it is time to consider talking to a bankruptcy attorney and have the bankruptcy chapters explained. Any attorney that specializes in bankruptcy law will be able to offer you a free consultation to have all your bankruptcy questions answered and explain the process in detail and let you know what is it that you can expect and whether this is a viable option for you or not.
There are basically two types of bankruptcy for an individual:
Chapter 7 Bankruptcy
A Chapter 7 is when an individual can not repay his or her debts and asks a federal court to grant them a Chapter 7 discharge. Under a Chapter 7, all of your unsecured debt will be wiped clean while your secured debt can be dealt with by liquidating some of your assets. For example, if you have a debt from a Best Buy card, that is secured debt and you may be asked to return the TV or whatever other appliance you bought with it. While this is not common practice, it can happen. Sometimes the creditor will offer you to settle for pennies on the dollar and let’s say that you owe $1000 on that secured debt card, probably the merchant will offer you to settle for $250. Otherwise, this debt gets wiped with all other debts.
Chapter 13 Bankruptcy
This is also known as the Wage Earners Bankruptcy. Under a Chapter 13, the court analyzes all your income and expenses and determines how much money leftover you have each month. This money is used to repay a portion of your debt. Typically the court will order a repayment plan of 3 – 5 years. At the end of such period, all unpaid portion of your debt will be wiped clean.
What Will Happen To My Credit?
Let’s be honest here. Your credit score will take a hit. But if you are researching bankruptcy options, then chances are good that your credit is already suffering. This discharge will stay on your credit report up to 10 years but you can begin rebuilding your credit as soon as a few months after the process is finished. Another advantage is that by law, once your process begins, all your creditors must stop any communication with you either by phone or mail. In other words, no more creditors harassing you day and night.
Bankruptcy Pros and Cons – Bankruptcy Questions Answered to Find the Light at the End of the Tunnel
January 10, 2010 By Leave a Comment
There a few feelings worse than being harassed by creditors calling you at your office and at home at all hours of the day. That nasty feeling in your stomach every single time the phone rings and that you are fully aware that it is going to be someone from any of your credit cards or mortgage payments to remind you that you are past due or worse, to threaten you with lawsuits and wage garnishments. There are so many different reasons why you are behind. Perhaps you lost your job or got a big pay cut due to the economy. Perhaps you had to face a medical emergency after you lost your income and fell behind on your payments and now you are in very deep hole and you don’t know what to do and you are considering all the bankruptcy pros and cons.
Firstly, please relax and know that the law affords you the protection of a bankruptcy filing. There are many myths involved when it comes to filing but some of the most common bankruptcy pros and cons are these:
Pros
1. You will put a stop to creditors harassing calls. By law they can’t call you anymore
2. You will get a break and instead of struggling to make minimum payments you will be able to start saving little by little until you are back on your feet
3. Most of your debts will be wiped clean with a court ordered discharge allowing you a clean slate to start anew
4. You will be able to begin rebuilding your credit as soon as a few months after your discharge
Cons
1. The bankruptcy discharge will stay on your credit report up to 7 years
2. You may experience a sense of defeat because you had to file
3. You may not be able to access lower rate credit plans in the near future
4. It may be difficult for you to obtain credit a few months after the discharge
In reality, the pros far outweigh the cons because it will allow you to get back on your feet quicker. Paying the minimum payments will take you many years before you can get rid of that debt. With bankruptcy chapter 7 or chapter 13 you will be debt free far quicker.
Many types of Bankruptcy Loans
January 9, 2010 By Leave a Comment
Common sense dictates that someone who has gone through a Bankruptcy will not be able to get approved for a loan. However, the financial industry is known to rapidly create solutions to customer